8-K/ALeadership ChangesExhibits & Filings

ONEOK INC /NEW/ 8-K/A Report, Executive Changes (Dec 22, 2006)

Filed December 22, 2006For Securities:OKE

Summary

This 8-K/A filing by ONEOK, Inc. (OKE) primarily serves as an amendment to previous filings concerning management changes. The key update for investors is the execution of an Amended and Restated Termination Agreement with John W. Gibson, effective December 21, 2006. While the core terms of his severance remain similar to his previous agreement, a significant new provision mandates that the company will provide gross-up payments to Mr. Gibson to cover any excise taxes on 'excess parachute payments' related to his severance. This agreement outlines specific conditions under which Mr. Gibson would be entitled to severance, namely termination by the company without "just cause" or by him for "good reason" within three years following a change in control. The severance package includes a lump sum payment based on a multiple of his annual compensation, pro-rata short-term incentive compensation, accelerated vesting of retirement and other benefits, and continued welfare benefits. Investors should note the potential financial implications of these gross-up provisions for the company in the event of a change in control and subsequent termination.

Key Highlights

  • 1ONEOK, Inc. filed an 8-K/A to amend previous filings regarding director elections and committee assignments.
  • 2The primary focus of this amendment is the Amended and Restated Termination Agreement with John W. Gibson, effective December 21, 2006.
  • 3A new provision in Mr. Gibson's termination agreement includes company gross-up payments to cover excise taxes on excess parachute payments.
  • 4Severance payments and benefits are contingent on termination by the company without 'just cause' or by Mr. Gibson for 'good reason'.
  • 5The termination trigger is applicable within three years following a change in control of ONEOK, Inc.
  • 6Severance includes a lump sum payment (multiple of annual compensation), prorated incentive compensation, accelerated vesting of benefits, and continued welfare benefits.
  • 7The filing also references the prior election of John W. Gibson and David J. Tippeconnic to the Board of Directors and Mr. Tippeconnic's committee assignments.

Frequently Asked Questions

The main purpose of this filing is to amend previous reports and disclose the details of an Amended and Restated Termination Agreement entered into with John W. Gibson, which includes a new provision for excise tax gross-up payments.

Mr. Gibson is entitled to severance payments and benefits if his employment is terminated by ONEOK, Inc. for 'just cause' or by him for 'good reason' within three years following a change in control of the company.

The 'gross-up payments' provision means that ONEOK, Inc. will pay Mr. Gibson an additional amount to cover any excise taxes he might owe if his severance payments are classified as 'excess parachute payments' under tax law. This can represent a significant potential cost to the company.

No, this filing does not indicate an immediate change in control or departure. It amends previous reports and details the terms of a termination agreement that would be triggered under specific future circumstances, such as termination following a change in control.